On June 26, the well-known crypto exchange Binance decided to delist 12 confidential tokens in Europe. The innovation concerns such countries as France, Italy, Spain and Poland. But later it became known that the crypto-exchange softened the ban and left seven tokens in trading pairs.
Let’s figure out why Binance no longer wants to trade anonymous “coins”, how these changes will affect the crypto industry and whether it is worth investing in confidential projects.
What Anonymous Coins Are
Privacy coins, or anonymous coins, are a type of cryptocurrencies that offer more privacy and anonymity for transactions. These coins use various techniques to hide the identities and activities of the users, unlike conventional cryptocurrencies like Bitcoin, where transactions are visible and trackable on a public ledger.
Notable examples of anonymous coins include Monero (XMR), Zcash (ZEC), and Beam (BEAM). These coins have been developed with the goal of offering individuals enhanced financial privacy and fungibility, which means that each coin is interchangeable with any other coin of the same value, irrespective of its transaction history. However, it’s important to note that the use of anonymous coins has also raised concerns about potential misuse for illicit activities, which has led to discussions about regulatory measures in some jurisdictions.
Privacy Coin Delisting in Europe
Back in the spring, the Binance crypto exchange announced a refusal to trade confidential coins on its own platform in the European Union. This means that users in Poland, France, Italy and Spain cannot purchase or sell anonymous tokens.
So which tokens did Binance plan to delist? These are the projects:
- Decred (DCR)
- Dash (DASH),
- Zcash (ZEC),
- Horizen (ZEN),
- PIVX (PIVX)
- Navcoin (NAV),
- Secret (SCRT),
- Verge (XVG),
- Firo (FIRO),
- Beam (BEAM),
- Monero (XMR),
- MobileCoin (MOB).
It should be noted that three tokens, namely Monero, Zcash and Dash, are among the top 100 cryptocurrencies by capitalization.
Recently it became known that the crypto exchange decided to soften its policy on private coins. Right now there are only 5 coins, namely BEAM, XMR, MOB, FIRO and ZEN are subject to restrictions.
Why Exchanges Don’t Want to Deal with Private Coins
The fact is that European regulators do not like private cryptocurrencies. And all because the European Union is trying to solve the problems with money laundering associated, among other things, with anonymous crypto transactions. Therefore, in order to comply with local regulations, exchanges have to stop trading privacy coins.
How the Delisting of Private Tokens Will Affect the Crypto Industry
The delisting of anonymous cryptocurrencies is a massive trend as the whole world conducts legislative regulation of this industry. Moreover, these trends accelerated with the adoption of the Markets in Crypto-Assets (MiCA) regulation bill for digital assets in Europe.
It can be expected that in the near future the influence of regulators will grow, and crypto projects will be ready to cooperate with them to ensure compliance with all norms and requirements.
The Best Way to Invest in Privacy Cryptocurrencies
In light of current trends, investing in private coins should be even more cautious. But this does not mean that they should be abandoned. Private coins are suitable for short-term investment and trading, while long-term holding of such assets is extremely risky.
Diversify. If your portfolio is still full of BEAM coins that already have at least 2 red flags, such as delisting and low market cap, it’s time to trade them for more capitalized and safer assets. For example, you could convert 90% of your BEAM to ETH (20%), BTC (30%), BNB (10%), XRP (10%), HBAR (10%) and QNT (10%). Smart asset allocation in the portfolio will reduce risks and maximize profits.
This is just an example of diversification, not a call to follow it exactly. If you are choosing between Hedera and Quant crypto projects, compare HBAR vs QNT, study each coin, its technology, development team, market dynamics and fundamental factors that can affect its price. Only in this way will you be able to make the best decisions in this fickle sector.